Question
Bluemark Health Care Inc. is owned and operated by Dr. George Hancock, the sole stockholder. Bluemark's final December 31, 2013 post-closing trial balance appears below.
Bluemark Health Care Inc. is owned and operated by Dr. George Hancock, the sole stockholder. | |||||||||||||||
Bluemark's final December 31, 2013 post-closing trial balance appears below. | |||||||||||||||
Bluemark Health Care Inc. is owned and operated by Dr. George Hancock, the sole stockholder. | |||||||||||||||
Bluemark's final December 31, 2013 post-closing trial balance appears below. | |||||||||||||||
January 1, 2014 | |||||||||||||||
Account | Debit | Credit | |||||||||||||
Cash | 20,000 | ||||||||||||||
Accounts Receivable | 34,500 | ||||||||||||||
Prepaid Insurance | 700 | ||||||||||||||
Supplies | 1,000 | ||||||||||||||
Building | 150,000 | ||||||||||||||
Accumulated Depreciation | 11,200 | ||||||||||||||
Land | 120,000 | ||||||||||||||
Accounts Payable | 7,500 | ||||||||||||||
Unearned Revenue | - | ||||||||||||||
Wages Payable | - | ||||||||||||||
Notes Payable | 30,000 | ||||||||||||||
Capital Stock | 50,000 | ||||||||||||||
Retained Earnings | 227,500 | ||||||||||||||
Dividends | - |
| |||||||||||||
Income Summary | |||||||||||||||
Service Revenue | - | ||||||||||||||
Wages Expense | - | ||||||||||||||
Utilities Expense | - | ||||||||||||||
Rent Expense | - | ||||||||||||||
Interest Expense | - | ||||||||||||||
Miscellaneous Expense | - | ||||||||||||||
Supplies Expense | - | ||||||||||||||
Insurance Expense | - | ||||||||||||||
Depreciation Expense | - | ||||||||||||||
326,200 | 326,200 | ||||||||||||||
During January, 2014, Bluemark Health Care entered into the following transactions: | |||||||||||||||
Trans #/Date | Description | ||||||||||||||
# 1 - Jan 1 | Received $15,000 from Rivers Company as rent for the use of a vacant office in | ||||||||||||||
Bluemark Health Care's building. Rivers paid the rent six months in advance. | |||||||||||||||
#2 - Jan 1 | Paid $4,200 for an insurance premium on a general business policy. This payment | ||||||||||||||
was debited to Prepaid Insurance. | |||||||||||||||
#3 - Jan 6 | Purchased supplies of $1,800 on accounts. | ||||||||||||||
#4 - Jan 9 | Collected $27,500 for services provided to customers on account. | ||||||||||||||
#5 - Jan 11 | Paid creditors $3,000 on account. | ||||||||||||||
#6 - Jan 18 | The sole shareholder invested an additional $25,000 in the business in exchange for | ||||||||||||||
capital stock. | |||||||||||||||
#7 - Jan 20 | Billed patients $62,000 for services provided on account. | ||||||||||||||
#8 - Jan 25 | Received $12,900 for services provided to customers who paid cash. | ||||||||||||||
#9 - Jan 30 | Paid cash for expenses as follows: wages, $24,000; utilities, $6,000; rent on medical | ||||||||||||||
equipment, $5,000; interest, $200; and miscellaneous, $2,500. | |||||||||||||||
#10 - Jan 30 | Paid dividends of $15,000 to stockholders (Dr. Hancock). | ||||||||||||||
January 31, 2014 Bluemark Health Care adjustment data appears below: | |||||||||||||||
Adjust A | $800 of the prepaid insurance expired during January. | ||||||||||||||
Adjust B | $1,100 of supplies were on hand on January 31. (hint: check the unadj supplies bal first). | ||||||||||||||
Adjust C | January depreciation on building was $2,000. | ||||||||||||||
Adjust D | $2,500 of unearned rent revenue was earned. | ||||||||||||||
Adjust E | Wages owed employees but not paid was $1,700. | ||||||||||||||
Adjust F | Services provided but not billed to patients was $10,000. | ||||||||||||||
Requirements: | |||||||||||||||
| |||||||||||||||
balances from the January 1, 2014 trial balance. | |||||||||||||||
Prepare journal entries for the 10 transactions in January 2014. | |||||||||||||||
Post the transaction entries to the T-Accounts and prepare a 1/31/14 unadjusted | |||||||||||||||
trial balance. | |||||||||||||||
Prepare the adjusting entries A through F. | |||||||||||||||
Post the adjusting entries to the T-Accounts and prepare an 1/31/14 adjusted trial balance. | |||||||||||||||
Prepare an income statement, retained earnings statement, and a balance sheet for | |||||||||||||||
January 2014. | |||||||||||||||
Prepare closing entries at January 31, 2014 as follows: | |||||||||||||||
(1) Close revenue to Income Summary Account | |||||||||||||||
(2) Close expenses to Income Summary Account | |||||||||||||||
(3) Close Income Summary Account to Retained Earnings | |||||||||||||||
(4) Close Dividends to Retained Earnings | |||||||||||||||
Prepare a January 31, 2014 post-closing trial balance. | |||||||||||||||
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